+1 for not failing the MOT as they not neccessary in the UK, but that's only my assumption. I'd want 100% clarification from an MOT place ior the DVLA myself.
Obviously, the blend if up to you as it's personnal prefernce. I think it looks much better completely blended, but it's not as practical as you'll never been able to just remove the rear bumper and like Jazz says, the potential for cracks is higher. With regards to the cracks, my trial bumper is completely blended and it's been like that for two years with no cracks - I'd have it done again in an instant. It's the front bumper you never want to blend in!
And I'd go for a shiney black. Cars are supposed to look metalic / shiney IMO, matte black is just wrong.
This is a full blend with VS arches: